Rumours suggest an AMD break-up as Revenue estimates are being lowered

Advanced Micro Devices (AMD) has now lowered its estimated revenue for the second quarter of 2015. The estimates are now below analysts’ average. The company says that it expects the “second quarter revenue to decrease approximately 8 per cent sequentially, compared to the previous guidance of down by 4 per cent, plus or minus 3 per cent.”

This drop in revenue spreads the rumours that the company would be staging a break-up.

In the aftermath of this estimate, the stock price of AMD plunged by 15 per cent. AMD’s reason for that instant decline is “weaker than expected consumer PC demand impacting on the company’s Original Equipment Manufacturer (OEM) APU (Accelerated Processing Unit) sales.”

These statements by the company are enough to ignite rumours about the break-up or a spin off part of the business that would result in them getting back on the right path.

But the comments by the company spokesperson and the CEO doesn’t seem to support the rumours.

Recent an AMD spokesperson said that they have “no such projects in the works,” instead, they will start focusing on gaming, immersive computing (aka virtual reality), and data centre infrastructure markets.

AMD CEO Lisa Su back in May, in a session with the analysts said that “We don’t need to do everything. We need to pick the things we can do very well.”